AH&LA, CBRE report finds multiunit hosts the main driver of Airbnb growth

Airbnb has slowly been making efforts to comply with travel and hospitality regulations, but a new report released but the American Hotel & Lodging Association shows the home-sharing company may not be weeding out illegal operators under its umbrella.

The report, titled “Hosts with Multiple Units – A Key Driver of Airbnb Growth,” found that roughly 81 percent of Airbnb’s U.S. revenue comes from whole-unit rentals. These rentals are defined as units where the owner is not present during the time of the rental, and account for $4.6 billion of the company’s revenue.

The study was conducted by CBRE Hotels’ Americas Research, and was funded by the American Hotel & Lodging Education Foundation. The study also showed additional evidence that nearly $2 billion in Airbnb’s revenue in 2016 (40 percent of the company’s total national revenue) came from hosts renting two or more entire home units at once. These multiunit operators are also Airbnb’s fastest-growing business segment, with hosts operating 10 or more properties generating a quarter of the company’s multihost revenue (approximately $175 million across 13 markets included in the study).

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Other key findings in the study include:

  • In the U.S., hosts renting out two or more entire-home units generated nearly $2 billion in revenue in 2016. In the 13 markets highlighted, revenue reached $700 million.
  • Revenues from whole-unit rentals are up 78 percent over the previous year. 
  • Each of the 13 cities studied saw an increase in the total number of listings by multiunit hosts. In Nashville, Seattle, Oahu and New Orleans, the growth in the number of units managed by multiunit operators more than doubled—and Nashville saw an increase of more than 160 percent.
  • The markets with the highest share of total revenue derived from multiunit hosts are Miami (57.9 percent), Oahu (53.5 percent), and New Orleans (42.3 percent).
  • In almost every market examined in the report, the percentage of revenue from multiunit hosts increased from 2015 to 2016, with the two exceptions being New York City and San Francisco, where policymakers have enacted regulations to limit abuse by commercial operators and ensure short-term rentals represent true home sharing.
  • Revenue growth for entire-home properties increased an average of 76 percent in the 13 markets studied. Nashville (up 283 percent) was the fastest-growing market followed by Oahu (up 187 percent) and New Orleans (up 144 percent).

“Once upon a time Airbnb might have simply been a home-sharing company, but this analysis shows that’s just a fairy tale now,” said Katherine Lugar, AH&LA president and CEO. “This report provides a stark contrast to the picture that Airbnb presents to policymakers and the public and sheds light on why the company has largely refused to take even basic steps to stop illegal hotel operators, because these actors drive the overwhelming—and growing—portion of its revenue. Indeed, it appears that Airbnb is actively supporting this commercial activity rather than trying to operate within the boundaries of the law. Today we are calling on Airbnb to finally come clean, tell the truth to the communities where it operates and crack down on the illegal hotels that it facilitates.”

During the 20th International Hotel Investment Forum, which took place earlier this week at the Hotel InterContinental Berlin, Yotel CEO Hubert Viriot told HOTEL MANAGEMENT he is not particularly afraid of Airbnb, stating the organization’s model works for some groups but not all, and hotels need to stay true to their core concepts in order to succeed in an environment with a dominant Airbnb. However, this recent AH&LA report follows another published earlier this week by former Montana state tax official Dan Bucks, which claims arrangements between Airbnb and local cities contain language shielding commercial hosts from audits and requests for back taxes. 

The report was also supported by the AH&LA, and is based on a review of 12 tax agreements between Airbnb and U.S. cities.

Though the AH&LA is a frequent critic of Airbnb, which is to be expected from a lobbying group for the hospitality sector, Bucks’ report raises some key questions about the deals Airbnb is signing with cities. Of particular note is the degree of secrecy surrounding Airbnb’s terms, in one case stating: “The agreements provide a shield of secrecy for lodging operators that prevents their discovery by public agencies and creates a de facto tax and regulatory haven for those operators.”

For the time being, Airbnb is making nice with regulators in order to try and shake off some of the attention following it. Regardless of how you slice it, the company isn’t getting smaller, with the company last valued at $30 billion.

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